Jan. 6 (Bloomberg) -- U.K. services growth unexpectedly
slowed for a second month in December after surging the most in
16 years at the start of the fourth quarter.

An index of services activity fell to 58.8 from 60 in
November, Markit Economics and the Chartered Institute of
Purchasing and Supply said in a report today in London. The
median of 24 estimates in a Bloomberg News survey was for a
reading of 60.3. Separate reports showed services in China and
the euro area weakened last month, while economists forecast
that they strengthened in the U.S.

The U.K. services gauge continues to point to growth in the
sector. Markit said the reading, along with its factory and
construction indexes, indicate economic growth accelerated to 1
percent in the fourth quarter from 0.8 percent in the previous
three months.

“More strong growth looks likely as we move into 2014,”
said Chris Williamson, chief economist at Markit. “It is
perhaps inevitable, however, that we may see the rate of growth
slow compared with the unusually strong pace seen in recent
months.”

The pound extended its drop after the report and was down
0.4 percent to $1.6352 as of 9:56 a.m. London time.

BOE Decision

The Bank of England holds its first monetary policy meeting
of 2014 this week and will keep its benchmark interest rate at a
record-low 0.5 percent in line with its guidance, according to a
Bloomberg survey. The Monetary Policy Committee has pledged to
leave its key rate on hold until unemployment, now at 7.4
percent, falls to 7 percent.

While the U.K. services gauge has slipped, it’s been above
the 50 level that divides expansion from contraction for 12
months. Markit said new business rose at a slower pace in
December, though growth remained “sharp.” For the fourth
quarter, new work rose at a survey record and the overall
measure continues to point to a “historically strong rate of
expansion.”

Markit’s manufacturing index declined to 57.3 last month
from 58.1 in November, while the construction gauge slipped to
62.1 from 62.6, it said last week.

A Chinese services-industry gauge decreased to 50.9 in
December from 52.5 the previous month, HSBC Holdings Plc and
Markit said.

In the euro area, a services measure decreased to 51 last
month from 51.2 in November, while a composite measure of
services and manufacturing increased to 52.1 from 51.7. The
readings were in line with estimates published on Dec. 16.

The Institute for Supply Management’s U.S. non-manufacturing index rose to 54.6 in December from 53.9,
economists said before a report later today.